Goldman Sachs' Fund Drops 5.6% as Interest Rate Bet Goes Bad

The Goldman Sachs Global Opportunities Fund, a $3.2bn hedge fund, declined in October after a bet on a rise in interest rates went bad.

The fund, which invests based on cues from Goldman's asset-management unit's fixed-income team, took a position that interest rates would rise.

However, when that did not happen, the fund declined 5.6%, unnamed sources told Bloomberg.

Pursued by the news agency, Andrea Raphael, a spokeswoman for the US-based bank did not comment on the fund's performance.

The Global Opportunities Fund, that has counted former US presidential contestant Mitt Romney among its investors, is a relative value pool that bets on rising and falling prices in the global fixed-income and forex markets.

The fund is overseen by Jonathan Beinner, co-head of global fixed income at Goldman Sachs Asset Management, and Samuel Finkelstein, head of macro strategies within the fixed-income team, according to a regulatory filing.

The fund has declined 2.6% in the 10 months through October.

Infrastructure Fund

In October, the US banking group was reportedly considering launching a new infrastructure fund.